Read the exclusive interview with Arne Mielken (AM) as we delve into DEFRA's SPS approach and what it means for compliance with veterinary border controls on 30 April 2024.
Recently, Customs Manager Ltd said how with SPS expert and Managing Director Arne Mielken to quiz him about the revelations over last week on DEFRA SPS controls from 30 April 2024.
Customs Manager Ltd. (CML): Arne, the recent Financial Times report has highlighted some concerning developments regarding DEFRA's decision to set inspection rates to "zero across all commodity groups – which would effectively mean NO CONTROLS from 30 April 2024. Can you provide more details on why DEFRA has taken this approach?
Arne Mielken (AM): Certainly. DEFRA seems to have decided to set inspection rates for most products that we import from Europe, including most, if not all, medium-risk SPS goods, to zero. This stems from concerns about potential disruptions at the ports if the new border measures are fully implemented as planned, starting on 30 April 2024. The FT saw a PowerPoint presentation from DEFRA, which outlined the risk of significant delays if inspections were carried out across all commodity groups simultaneously. DEFRA says that they have opted for a phased implementation approach to avoid overwhelming port systems and ensure a smooth transition by initially setting inspection rates to zero.
CML: That's insightful. Considering the business implications, could you elaborate on how BTOM Import Border Controls from 30 April 2024 might affect UK importers financially?
AM: Certainly. While DEFRA's decision aims to prevent chaos at the ports, it raises concerns about the fairness and transparency of charges for businesses. Suppose controls are set to zero for medium-risk goods (which includes, for example, most fresh meats, eggs, milk, fish and fishery products). In that case, businesses could still incur charges under DEFRA's Common User Charge in the absence of inspections, amounting to up to £145 per shipment. This potential financial burden on businesses, especially if they are paying for "non-existent" controls, adds to the uncertainty and could impact their operations.
CML: But DEFRA said that there will be controls, so what is going on?
AM: Formally, yes. With a focus on "highest risk goods", which means NOT on low or medium-risk goods. In other words, goods with the vast majority of food products will not encounter any inspection at all, but they will have to pay for it. Previously, the medium-risk category goods had an inspection probability of 1-30%, so up to one in three trucks could be pulled for inspection. If this rate is set to zero, there is no chance of all of these goods being pulled. So, why pay? It's clear that the requirement must be to delay the payment of the Common User Charge until actual inspections at the Border Control Post start.
We had to hear all of this from the FT, not DEFRA. Why?
CML: Thank you for clarifying. How do you think this lack of transparency from DEFRA might impact businesses' confidence in the government's handling of border controls? Could you elaborate on the potential consequences this might have for businesses, such as increased uncertainty or difficulty in planning for future import operations?
AM: The lack of clear communication and transparency from DEFRA has undoubtedly shaken businesses' confidence in the government's ability to manage border controls effectively. It is important that the PowerPoint presentation that the FT refers to is shared with trade associations, too. Businesses rely on clear and timely information to make informed decisions and plan their operations. The potential disruptions in trade operations due to the secrecy surrounding DEFRA's plans only add to the uncertainty. Rebuilding trust and providing transparent communication are essential for restoring confidence among businesses.
CML: But DEFRA has responded within 24 hours with a blog, stating that checks will indeed begin on 30 April 2024. How do you assess DEFRA's response?
AM: DEFRA's response is a step in the right direction regarding reassuring businesses. However, companies still need more detailed guidance and support to navigate the changes effectively. For example, here is a list of what we still don't know with 100% certainty, just days before the controls enter into force:
BCP opening hours and how this will work with pre-notification;
Charges for all BCPs;
PHA charges;
Systems of payment;
Timeframe for payments;
Penalties/enforcement for non-payment
While it's reassuring that checks will commence on 30 April, DEFRA must provide clear and comprehensive information to help businesses prepare to implement border controls.
CML: Arne, you mentioned charges of up to 145 GBP; let's delve into the details of the BTOM SPS charges. Could you explain the two standard charges associated with imports of Sanitary and Phytosanitary (SPS) goods and the BTOM?
AM: Certainly. Note that we are talking about MORE than 145 GBP. The first charge is the Border Control Post (BCP) charge levied by commercial ports and airports for using the BCP at the nominated Point of Entry (PoE). For example, at the planned government-run BCP at Sevington, the associated charge is the Common User Charge (CUC). The CUC will be applied to imports entering Great Britain through the Port of Dover and Eurotunnel, with rates ranging from £10 to £29 per commodity line depending on the risk category of the goods and whether they "are eligible" sanitary and phytosanitary (SPS) checks. Importers must provide billing details in each IPAFFS notification, and invoices will be issued monthly, with compliance measures in place to deter late payment or non-compliance. This one can go up to 145 GBP. "Being eligible for inspection" does not mean that there has to be an inspection, so even if the control rate is zero, your products are still "eligible", and you still have to pay.
CML: Thank you for clarifying. What about the second charge, the SPS documentary and inspection charge?
AM: The SPS documentary and inspection charge covers the costs associated with any checks that goods may undergo, including documentary, identity, and physical inspections. These charges are imposed by the relevant authorities depending on the type of goods and the location of the point of entry. The charges for animal products entering England and Wales are levied by the Port Health Authority (PHA). In contrast, for plants and plant products, they are payable to the Animal & Plant Health Agency (APHA) in England and Wales and to the Scottish Government (SASA) in Scotland.
CML: Thank you for your insights, Arne. So, it seems controls are going ahead. Could you summarise the changes traders can expect from 30 April 2024 and how they will be affected?
AM: Certainly. From 30 April onwards, traders must ensure that goods arrive through appropriately designated Border Control Posts (BCPs) or Control Points (CPs) for their commodity type. They may (or now may not) be subject to documentary, physical, and identification inspections at the BCP or CP. Additionally, depending on the nature of the goods and the port of entry, charges such as the BCP Charge and the Sanitary and Phytosanitary (SPS) Documentary and Inspection Charge will apply. Traders need to stay informed and prepared to comply with these regulations to avoid disruptions in trade operations.
CML: What are the steps a British Importer needs to take? Do you have a step-by-step guide?
AM: Certainly. You can download it here.
CML: We know pre-arrival notifications are needed. Can you elaborate on the need to create an IPAFFS?
AM: Certainly. I have completed one for you and took screenshots, which you can access here. Check out the guides and resources here if you are dealing with plants.
CML: HMRC has recently alarmed traders about a "no match" possibility when it comes to matching the IPAFFS registration number and CDS Customs Declaration. Can you explain?
AM: Yes. HMRC emphasised the importance of data alignment between CHED on IPAFFS and CDS declarations to avoid "no match" scenarios. Importers were advised to comply with all requirements by 30 April, with heightened controls expected at each location. You can also read about it all here.
CML: What about typical errors to avoid? Can you provide some suggestions on what errors you have, e.g. with Export Health Certificates of completion of IPAFFS?
AM: Certainly. I have made an entire blog entry on it. Please read about it here.
CML: I heard about special notification requirements for fishing under IPAFFS. Can you explain?
AM: Yes, IUU fishing documentation (catch certificates, processing statements, and storage evidence) must now be uploaded to IPAFFs; more details are here.
CML: Traders have expressed to us that they are concerned by their legal responsibilities and wonder if there is an overview of what is entailed.
AM: Yes, there is. Here, I have detailed the legal responsibilities and how to meet them for Animals, Animal Products, and Plants in Great Britain.
CML: That's informative. Where can traders find more information about these charges?
AM: There is a further quite detailed FAQ document on IPAFFS and Export Health Certificates that you can access here. Pre-recorded videos are worth watching as they explain very well how the new system will work. Take a look here. Of course, our collection of articles on www.customsmanager.info is constantly updated to keep our Premium members fully informed. I recommend you bookmark this: See here for the latest updates.
CML: Can you recommend what British businesses should prepare for?
AM: British importers should proactively review their supply chain processes and documentation to ensure compliance with the new regulations. Additionally, considering the potential financial implications, importers should incorporate these charges into their budgeting and pricing strategies to mitigate any adverse impacts on their business operations. You can also seek outside counsel and support; for example, check out all the support services that Customs Manager Ltd offers in the area of SPS controls. Best of all, you can book a free call here.
CML: Thank you for clarifying all this, Arne. Traders need to understand these charges to ensure compliance and proper financial planning.
AM: Absolutely. Understanding these charges is crucial for traders to navigate the import process smoothly and avoid unexpected costs or delays.